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Research on Immigration and Integration in the Metropolis
www.riim.metropolis.net
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Disequilibrium on the Canada-Mexico Labour Markets: A case for expanding Canada’s Temporary foreign workers Program?
Don J . DeVoretz Professor, Simon Fraser University
Canada
Co-Director RIIM,Metropolis Project Canada
Presented at Labour Market Interdependence in North America: Challenges
and Opportunities of an Aging PopulationNovember 13, 2006
Mexico City
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Figure 1: Temporary Visas for professional and technical w orkers.
-
10,000
20,000
30,000
40,000
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
year
nu
mb
er
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Figure 2: Temporary Visas for Skilled w orkers.
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
year
num
ber
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Figure 3: Temporary Visas for Unskilled w orkers.
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5,000
10,000
15,000
20,000
25,000
30,000
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
year
numb
er
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Figure 4: Temporary Visas for Managerial w orkers.
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5,000
10,000
15,000
20,000
25,000
30,000
35,000
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Year
num
ber
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Figure 5. Permanent Immigrant Flows 1996-2005
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
year
nu
mb
er
managerial
professionals
skilled
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Expanding Canada’s Temporary Foreign Worker Program ?
• Should Canada expand its Seasonal Agriculture Workers Program (SAWP) to include more sectors, occupations and/or regions?
• Should Canada expand its low-skilled temporary foreign worker policy to sectors, occupations and/or regions?
• Should Canada expand its high skilled temporary foreign worker policy?
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Normal Case
• Displacement equals OA
• Wage compression Wc to Wc’
• Who compensates lost workers?
• Who compensates lost wages?
• Who decides on optimal number of migrant admissions?– Ab or ad?
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Dynamic Case:Nannies
Demand Curve Shifts and Reservation Wage Rises
• Equilibrium:Pre-Demand Shift– OA Canadians working at Wcad
– 100 % Canadian labour market
• Demand Shift– Wages rise from WCad to WUS
– Reservation Wage Rised for Canadians• All New Hires Foreign Born
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How to Evaluate Impact Under 2 Scenarios ?
– Net Benefit Rule: Govt arbitrarily decides on AB• Case A: Ambiguous
– Why allow AB why not AD or Zero ?
– 2 Winners and 1 loser
• Case B: Admit Temporary Workers– All gain to foreign workers and Employers
– However, foreign workers set min wage
– Implementation Problems of Net Benefit Rule:• Where is individual worker ?Property Right on Job• How do know supply elasticities for
– every market- every individual?
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THUMB.ORG Temporary Hiring Unskilled Monster Board
• CIC Set target AB in old Regime
• Now Agents in Auction Market Decide if AB is Equilibrium :
• Revenue Canada:– Provides voucher for job - based upon previous T4– Collects turn-over fee: bonding, vetting and Board
» Cost free to Canadian tax payer– Daily quotes of terms for all successful bids and offers
• Workers: Voucher: – sell job for a fee or retain job– Tenure-less than 365 days
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Conclusions:
• Limited Opportunities in unskilled market
• Expansive possibilities in Skilled market
• Under proper structure all three can gain
• No need for gov’t interference
• Many Details to be worked out– Conversion rights– Security– Bonding of agents
